Understanding differences in the amount that states spend on K–12 education is complex because expenditures go farther in some parts of the country than others. This is mainly due to variation among states in labor costs. Education relies heavily on people—teachers, administrators, and support staff—so the amount that local education agencies must pay for staff salaries and benefits greatly affects their purchasing power.

Ranking states based on their education spending can be done with and without adjustments for regional variation in labor costs.

The left side of the figure below displays unadjusted expenditures in 2007–08 for the country's four largest states. California spent $9,706 per pupil, which earned the state a rank of 28th.

When the figures are adjusted based on the average salary costs in each state, the rankings change, especially for California. With those adjustments, California's per-pupil expenditure of $9,706 falls to $8,853, and its ranking of 28th falls to 43rd.

To see the unadjusted and adjusted expenditures and rankings of all 50 states and the District of Columbia, see this page.

When regional cost-of-labor differences are accounted for, California's per-pupil expenditure is even further below the national average, and its ranking drops dramatically

Per-Pupil Spending in 2007-08

 

Data: National Center for Education Statistics (NCES) and Professor Lori Taylor, Texas A&M University
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Professor Lori Taylor of Texas A&M University has developed a Comparable Wage Index (CWI) to adjust education expenditures across the country based on regional salary variation. The CWI measures variation in the salary costs of college-educated, full-time workers in noneducation fields, and assumes that school districts' personnel costs are affected commensurately. With about 80% of districts' spending going for labor costs (65% for certificated and classified staff salaries and 15% for employee benefits), the CWI is a reasonable, albeit imperfect, way to account for cost differences among states.